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Massachusetts Offshore Wind Prices Set to Reset: How Much Will Cost Change?

Posted on by darion

Massachusetts residents already pay some of the highest electricity prices in the country, and the state will need significantly more power as it tries to make a big transition away from fossil fuels. So how much will it cost to generate cleaner electricity from offshore wind?

Pricing details for the state’s newest crop of offshore wind projects won’t be available until contracts are filed this winter, and it’s clearly a sore subject for the industry and its supporters in state government. The projects selected this month are widely expected to cost taxpayers more than previous projects, and the Healey administration would only say they would be cost-effective compared with the costs of building other power projects in the future.

Electricity prices in the Boston area were 64% higher than the national average last month, federal data shows, and Massachusetts has abandoned an attempt to force a lower price cap on offshore wind in 2022, eliminating a legal requirement that each new project charge a lower price than the last.

Sen. Mark Montigny, a New Bedford Democrat who has praised the “generational economic development” his city and others are seeing from offshore wind, also made clear this month that he dislikes the way offshore wind prices are being set. In a statement, he said Massachusetts “needs to thoroughly examine the impact of these deals on taxpayers who simply cannot afford unsustainable energy costs.”

A large group of attendees at the Massachusetts Maritime Academy’s Women on the Water conference had the opportunity to get a close-up look at wind turbine blades on a barge at Vineyard Wind’s base at the New Bedford Marine Commerce Terminal during a cruise on the Cuttyhunk Ferry on March 2, 2024.A large group of attendees at the Massachusetts Maritime Academy’s Women on the Water conference had the opportunity to get a close-up look at wind turbine blades on a barge at Vineyard Wind’s base at the New Bedford Marine Commerce Terminal during a cruise on the Cuttyhunk Ferry on March 2, 2024.

A large group of attendees at the Massachusetts Maritime Academy’s Women on the Water conference had the opportunity to get a close-up look at wind turbine blades on a barge at Vineyard Wind’s base at the New Bedford Marine Commerce Terminal during a cruise on the Cuttyhunk Ferry on March 2, 2024.

“More government oversight and proper oversight is essential if we are to avoid another embarrassing situation like when companies were allowed to walk away from legally binding contracts due to predictable inflationary market pressures or when a shovel failure exposed a complete failure of preparation and public transport,” he said. “Shielding the project costs and the impact on taxpayers from this order until winter is not an acceptable start. Our residents deserve less cheerleading from regulators and other government officials and more aggressive oversight that is fully transparent to the public.”

Healey’s office said pricing information will be publicly released when contracts are submitted for approval by the Department of Public Utilities. The contract is scheduled to be submitted Dec. 18, but state officials say that’s merely a target date, instead repeatedly referring to “winter.” Bidding documents give the state-led evaluation team “the right to change the schedule if necessary.”

While we wait for details on this latest order, and for a ready point of reference, here are the prices associated with previous projects in Massachusetts:

• Cape Wind – 18.7 cents per kilowatt-hour (kWh), approved in 2010 and development completed in 2017.

•Vineyard Wind 1 – 8.4 cents per kWh, approved 2019 (total price in nominal dollars)

•Mayflower Wind (804 MW) – 7.8 cents per kWh, approved in 2020 and canceled in 2023 (total average price in nominal dollars)

•Mayflower/SouthCoast Wind (405 MW) – 7.7 cents per kWh, approved in 2022 and canceled in 2023 (total average price in nominal dollars)

• Commonwealth Wind – 7.2 cents per kWh, approved in 2022 and canceled in 2023 (total average price in nominal dollars)

•Average residential electricity price in the Boston area in August 2024: 30.5 cents per kWh

•National average electricity price for households in August 2024: 17.7 cents per kWh

This article originally appeared in the Cape Cod Times: Pricing details for newest offshore wind projects to be announced this winter